An Econometric Assessment Of Livestock Exports And Its Impact On Economic Growth In Somalia

Somalia's economy is an agricultural one based primarily on livestock and to a minor extent on farming.Livestock accounts for about 40 percent of GDP,60 percent of job opportunity and 80 percent of foreign earnings.Livestock holds a major role in Somalia's economy as it is postulated to be the largest sector,largest employer and a major income source for most households.The export sector has depended on a few of livestock products mainly Cattle,camel,goat and sheep.Which are characterized by fluctuations in quantity and price.Even though the major economic contribution of Somalia is coming from these four of livestock exports,but no one did the research on precisely these four of livestock exports.Therefore,this study can provide a valuable analysis of the Somali export situation and influencing factors for policymakers,economists and other socio-economic interested groups in the Somali economy,which is of great significance for the study of the future economic development of Somalia.The aim of the study was to assess the trend and impact of livestock(Cattle,Camel,Goat,and Sheep)exports for economic growth of Somalia over the last twenty-five years by looking at: the existence of the long run relationship between livestock export and economic growth;the speed of adjustment in the long run and the existence of causality between the livestock export and economic growth.A neoclassical production function model with an extension was employed in this study.The data were taken The Food and Agricultural Organization statistic data on countries' trade(FAOSTAT)and WDI(World Development Indicator)from the period 1990 to 2015.The analysis was done using reliable econometric models such as co-integration model,Error correction model and Granger causality model.The outcomes of the study indicate that,cattle and Sheep exports have a positive and significant effect on economic growth,whereas exports of camel were found to have a positive but statistically insignificant impact on economic growth.While Goat export was found to have a positive and significant effect on economic growth in long and positive but insignificant in the short run.On the other hand,the causal relationship found that there is a bi-directional relationship between Camel export,Cattle export,Sheep export,goat exports and economic growth.Based on the findings,this study recommends for implementation of policies that advances the effectiveness of veterinary services and the competence of staff in the quest for enhancement livestock production.Moreover,the study advocates that the government finance research activities on enhancing the value of camels as well as enhancing the quality of transports for camels.